Billed as China’s attempt to create an economic powerhouse to rival Silicon Valley, ‘The Greater Bay Area’ is a mega-region that includes nine cities in Guangdong province plus the Special Administrative Regions of Hong Kong and Macau. Since its launch in 2017, the GBA has worked to integrate these cities to boost economic growth, facilitate cross-border collaboration, and compete on a global scale.
As discussed elsewhere in this report, the GBA project has ramped up over the past 12 months, with significant progress towards big new projects at the Hong Kong/Shenzhen border, notably the Hong Kong-Shenzhen Innovation & Technology Park (HSITP) and the Greater Bay Area Clinical Trial Institute (CTI).
However, the initiative extends far beyond the narrow strip of land where Hong Kong and Shenzhen meet. Crossing the border for dinner or to purchase groceries has become a normal part of everyday life for many Hong Kongers in recent years. As the two sides of the border grow ever-closer, plans are in place to cater to a near future where their healthcare is increasingly intertwined.
This means older Hong Kongers moving to the mainland for more affordable medical care, as well as mainlanders visiting Hong Kong to access new treatments as yet unapproved in their territory. It covers creating access pathways to Hong Kong-approved drugs in select mainland hospitals as well as bolstering the overall level of care provided there. It involves facilitating cross-border clinical trials, creating data sharing platforms, and allowing Hong Kong’s researchers better access to the GBA’s population of over 86 million. And finally, it looks at combining Hong Kong’s excellence in medical research with the strong tech and manufacturing footprint in cities like Shenzhen to develop the next generation of biotech unicorns.
Migration Flows
The increased flexibility with which people can travel between Hong Kong and mainland China to live and work has been a notable trend in recent years. According to Hong Kong government statistics, from 2011 to 2021 the number of Hong Kong residents living in mainland China increased from around 230,000 to over 500,000, many of whom are choosing to retire in the more affordable and increasingly comfortable surroundings of the GBA.
“With the flexibility of Hong Kong residents moving between regions, including for retirement and work purposes, the landscape of medical tourism is evolving,” explains Sabrina Chan, senior executive director of the Hong Kong Association of the Pharmaceutical Industry (HKAPI). “Previously, the flow was predominantly from China to Hong Kong, but now there is a notable trend of Hong Kong residents staying within the GBA.”
“Many Hong Kongers are now traveling to the mainland for medical care, especially for expensive drugs, as prices are significantly lower there. For instance, biologics and targeted therapies are often only 30 percent of the price in Hong Kong,” adds Professor Justin Wu, associate dean (health systems) at the Chinese University of Hong Kong (CUHK). Wu predicts even more older Hong Kongers will stay put in the GBA, rather than returning home after receiving medical treatment. “The market forces will be further driven by the unaffordability of retirement in Hong Kong, where everything is expensive and institutional care is in high demand,” he says. “The lack of space in Hong Kong exacerbates this, with senior living facilities becoming overcrowded and unsuitable for a comfortable retirement.”
Dr Felix Lee of the GBA Healthcare Group, a firm which provides medical services, hospital management, and healthcare solutions within the GBA, including for many Hong Kong seniors, agrees. “Compared to cities in the GBA, Hong Kong remains expensive, and the longevity of retirees necessitates sustainability in their living arrangements. For example, a passive retirement income of HKD 10,000 (around USD 1,280) per month in Hong Kong may not sustain much, but in the GBA, it can stretch much further.”
This is not to say that it is all one-way traffic, indeed in the same period of 2011 to 2021, a full 1.3 million mainland Chinese moved to Hong Kong under the One-way Permit Scheme, allowing family reunification. Moreover, closer integration between Hong Kong and the mainland could provide a welcome economic boost for Hong Kong in attracting more medical tourism to the territory. As a 2023 report from the Swiss Re Institute shows, Guangdong residents express a strong preference for Hong Kong medical care as Hong Kong is considered to offer better quality care and shorter waiting times. Hong Kong medical insurance packages are also in high demand from mainlanders as they include features such as guaranteed lifelong renewal, higher sum-assured limits, and services such as second medical opinions from reputable overseas medical organisations that are not offered on the mainland.
Krish Sundaresan, GM for Hong Kong and Macau at American pharmaceutical giant Pfizer sums up, “Today, many patients from mainland China as well as elsewhere in North Asia, Central Asia, and Southeast Asia have to travel to Europe or the US for cutting-edge care. If Hong Kong can position itself as a centre for high-quality, advanced medical treatments, it can attract those seeking the best care closer to home. This includes cutting-edge therapies like gene therapies and the latest medical implants. By attracting thousands of patients for high-value medical treatments, we can unlock much greater potential.”
Healthcare Transformation
At the nexus of GBA healthcare integration lies the Nansha district of Guangzhou city. Primarily a rural area prior to the advent of the GBA initiative, Nansha was known for its agriculture, fishing, and small-scale industrial activities, but has now been designated a special economic zone with preferential policies aimed at boosting trade, investment, and technological innovation. Today, both the mainland Chinese and Hong Kong governments are hoping that more and more Hong Kongers will choose to work, live, and retire in Nansha, drawn by the low costs, convenient transportation, and increasingly Hong Kong-equivalent levels of healthcare.
CUHK has been an important part of Nansha’s healthcare transformation, having signed a comprehensive memorandum of understanding with the district’s local government in 2023. Professor Wu notes that, as part of this MoU, “CUHK staff act as advisors and connectors in Nansha to help build an ecosystem similar to Hong Kong’s. For instance, we are supervising the setup of health centres in a Tier 3A hospital [the highest level in the Chinese medical system – Ed.], which has a whole building ready for collaboration on theme-based projects. We help set up medical centres, oversee strategies, and guide daily operations. Guangzhou has a rich pool of medical talent to support these efforts.”
Over in Shenzhen, CUHK is adopting a different model, working with a single private hospital called Prince’s Bay. The location of this facility, in the Shekou Peninsula, is notable in that it houses around 80 percent of the city’s foreign expatriates, making it a high net-worth area. “Our role in this hospital is as a consultant,” explains Wu. “We focus on setting up the operating system, engaging doctors, training staff and nurses, and managing workflow, patient experience, and patient flow. This even includes counting the number of steps a nurse walks to minimise time costs. The goal is to build Hong Kong-style services known for their highly efficient, lean models.”
Bringing mainland hospitals in line with Hong Kong standards is no mean feat. As Felix Lee notes, “mainland China’s hospital system is quite different from other countries in that, although these hospitals are mostly non-profit and public in nature, they are still required to think of ways to become self-sustainable through generating income on a fee-for-service basis.” His own GBA Healthcare Group has established 200 public-private partnership clinics within community health centres in the GBA and trained and accredited more than 3,000 primary healthcare doctors and nurses to top-notch Hong Kong-esque standards since 2018.
“Public hospitals in mainland China operate like private businesses and must maintain break-even, affecting their behaviour and patient care quality,” adds Wu, who has high hopes that his institution’s GBA engagement can provide a cultural shift. “Hong Kong’s public health system, despite its challenges, still upholds a strong culture of public welfare,” he says. “This is a key feature we wish to share with our mainland collaborators. By building an efficient and lean healthcare ecosystem in Nansha, we hope to incorporate Hong Kong’s concept and culture into their future projects.
Access to Innovation Pathways
But it is not just Hong Kong’s healthcare culture that is now present in the GBA. Since 2021, selected Hong Kong-registered drugs not yet approved by mainland China’s regulator, the National Medical Products Administration (NMPA), have been made available in certain GBA hospitals.
“The process involves sourcing drugs from Hong Kong and importing them with a special license through customs for use in hospitals,” outlines Professor Lo Chung-mau, now Hong Kong’s Secretary for Health, but who helped pioneer the initiative while working at the University of Hong Kong-Shenzhen Hospital. “The drugs are charged at cost under the National Health Insurance (NHI) of mainland China, so Chinese patients do not rely on the Hong Kong financing system. This arrangement is part of a special measure to address the lag in the NMPA’s registration process. Many advanced drugs and devices used in Hong Kong are not yet registered in mainland China, which previously led many mainland patients to seek these treatments in Hong Kong.”
He adds, “with the development of the GBA, there is a push to improve healthcare services, including access to advanced drugs and devices. The rationale is that if these medical products are safe, effective, and used in Hong Kong, they should also be available in selected healthcare institutions in the GBA. This measure ensures that Hong Kong citizens working and living in the GBA receive a similar level of care and it significantly raises the healthcare standards in the region.” He adds that it could be a good steppingstone for pharmaceutical companies looking to eventually gain access to the entire USD 165 billion China market, the world’s second largest. “This initiative not only improves healthcare standards but also provides drug companies with a pathway to collect real-world data, which is crucial for formal registration with the NMPA.”
From the initial pilot project, this process has now been expanded across the region, as Maggie Lo, VP for Life and Health Technology at the recently established Hong Kong Office for Attracting Strategic Enterprises (OASES) explains. “32 drugs and 31 devices approved in Hong Kong can now reach patients in 19 designated healthcare institutions across the GBA, expanding their market reach and impact.”
Japanese neuroscience player Eisai is one company already making use of this pathway for its products, including a key insomnia medication. Andrea Chang, GM of the firm’s Hong Kong affiliate points out that “By leveraging the GBA framework, we have initiated collaborations with designated hospitals in mainland China. This approach not only helps introduce our products to Chinese patients early on but also supports the local medical community in gaining familiarity with our therapies.”
Others are keen to get on board. “Once a medicine has been registered in Hong Kong, it can also be accessed by patients in select GBA hospitals whose medical needs cannot otherwise be met,” reflects Lawrence Wong, GM of Swiss company Ferring’s Hong Kong operations. “Although, we have not utilised this new mechanism yet, we observe the significant potential for those newly/ready-to-be registered products in Hong Kong.” However, HKAPI’s Sabina Chan feels that there while this initiative has seen some progress, there is still room for improvement, “particularly in expanding the coverage of designated hospitals and categories of drugs.”
Research Potential
With greater access to innovative medicines across the GBA as well as increased levels of dialogue and collaboration between Hong Kong and mainland doctors and scientists, might the time be right for more clinical research to take place in the region? Professor Lo certainly thinks so, with the GBA CTI, a one-stop-shop for potential clinical trial sponsors, just the latest milestone in a half-decade of progress. “Hong Kong is no longer working on clinical trials in isolation,” he proclaims. “Pharmaceutical companies conducting clinical trials here now have access to a potential market of 86 million people within the GBA. This integration, driven by national policy and championed by President Xi, has been in progress for five years.”
“Two key factors make this an opportune time for establishing an innovation hub: the five-year progress of the GBA initiative and significant improvements in China’s healthcare system due to ongoing reforms,” adds Lo. “Ten years ago, collaboration would have been challenging due to the reliance on drug sales for income in Mainland hospitals. Doctors had to sell drugs to supplement their low salaries, which was not conducive to evidence-based healthcare.”
He continues, “However, with the zero-markup policy on medicines implemented about nine years ago, doctors no longer rely on drug sales for income. This shift has enhanced professionalism and evidence-based practice. Now, doctors prescribe drugs based on their efficacy and necessity for patient health, creating a more conducive environment for clinical trials.”
Over in Nansha, CUHK’s Professor Wu is keen to capitalise on the progress already made and ensure that the district becomes much more than just a cushy retirement home for Hong Kongers. “Our ongoing initiatives allow us to start clinical services under surveillance and conduct pharmacovigilance studies. In the medium term, we aim to establish a clinical research centre and conduct clinical trials there. We don’t need to wait for a large population to move into Nansha; this centre can attract demand from other provinces as well.”
Some of the key local biopharmaceutical players are keen to get involved. Mark Lotter, founder and CEO of Nuance Pharma, exclaims that “the integration of the GBA into Hong Kong’s regional scope represents a significant enhancement. On the clinical development side, previously, Hong Kong was limited to conducting phase I studies, necessitating moves to mainland China or across Asia for subsequent phases. However, the GBA initiative now offers a more comprehensive platform for pharmaceutical companies where both phase II and III studies can be conducted across the region.
Tom Lau, director of corporate finance at vaccine-focused Immuno Cure adds that his firm “has been very successful in utilizing the resources of the GBA. Our clinical trials are being conducted in Shenzhen, and our products are manufactured in Guangzhou.” The company’s CEO Dr Xia Jin adds that “Our experience with the clinicians in the GBA has been very positive. We are working with first-class clinicians who were among the first to treat AIDS patients in China with antiviral drugs. They are highly experienced and have a deep understanding of clinical research.”
A Start-Up Ecosystem Fit for Purpose
Then there is the potential to leverage the strengths of both Hong Kong and the mainland to build a more comprehensive life science ecosystem capable of producing scalable commercial companies. The host of advanced manufacturing facilities and the greater amount of space on the north side of the Shenzhen River can come to complement the brilliant scientists – from Hong Kong, the mainland and beyond – keen to spin out research projects from Hong Kong’s top universities into start-ups.
“The GBA is particularly relevant for Hong Kong companies because Hong Kong faces significant land constraints, with land being quite expensive,” explains Chuen Yan Leung, co-founder of local life science-focused VC firm Silver Dart Capital. “The GBA offers a convenient solution for Hong Kong start-ups to scale their scientific discoveries through large-scale manufacturing centres and lab space for further R&D. In Hong Kong, finding large lab spaces is a challenge, and the region does not really have that kind of resource for biotech ecosystems which require a lot of space.”
One such company is homegrown Hong Kong biotech Arbele, a clinical stage outfit centred on an innovative T-Cell Engager approach to gastrointestinal cancers. “Despite challenges with alignment across the GBA, we took the strategic decision to establish a presence there, even during the difficult COVID-19 period in 2020,” explains Chairman and Founder John Luk. “We secured incubators in the BioIsland Area of Guangzhou, where we have two companies: Tiberias Tech, focusing on diagnostics, and Caleb Biomedical for therapeutics. Caleb Biomedical will also help facilitate and advance our clinical trials in China.”
Luk continues, “There are ongoing efforts to harmonise regulations within the GBA which could soon lead to more streamlined processes and reduced bureaucratic hurdles. We want to be one of the early adopters of this change.”
Professor Philip Chiu, dean of the Faculty of Medicine at CUHK and a pioneer in minimally invasive surgery, endoscopic and luminal surgery, and robotics has also been able to leverage the GBA’s advantages in his work. Chiu’s Multiscale Medical Robotics Centre at CUHK has been collaborating with a start-up company called Cornerstone Robotics to develop a robotic surgery system that has already completed 55 cases in Hong Kong, 100 cases on the mainland and is currently awaiting NMPA approval. “Hong Kong excels in medical innovation, boasting top-tier medical care and brilliant scholars”, says Chiu. “However, for manufacturing, we leverage Shenzhen’s capabilities to keep costs low.”
Cognisant of the opportunities that the GBA project represents for start-ups, some Big Pharmas are looking to get in on the act and support the ecosystem’s development and start-ups from both sides of the border “We have partnered with Hong Kong Science & Technology Parks Corporation to co-incubate biotech start-up companies from both Hong Kong and mainland China,” lays out Diana Liu, GM of Swiss firm Roche in Hong Kong. “This initiative started in 2023, and we have already seen success, with our first company – BayOmics – setting up an office in Hong Kong a few weeks ago. This project focuses on mentoring these start-ups, helping them to think differently and facilitating their establishment, whether they are moving from mainland China to Hong Kong or vice versa.”
Fostering Greater Understanding
A project of the GBA’s scale and ambition is never without teething problems, and the tendency for misunderstandings on both sides is significant given the many social, cultural, and political differences (as well as similarities) between Hong Kong and the mainland. “It is crucial to understand what Hong Kong needs from the mainland and vice versa,” opines CY Leung, formerly Hong Kong’s chief executive and now vice chairman of the Chinese People’s Political Consultative Conference. Leung adds that he currently spends around 40 percent of his time travelling around mainland China to connect the needs and capabilities of both sides of the ‘one country, two systems’ arrangement. He continues, “Both sides have progressed quickly, and sometimes one side does not fully grasp what the other can offer. The mainland is vast, and it is challenging for Hong Kong people, including government officials, university professors, and business professionals, to cover this vast land mass comprehensively without dedicating significant time to the task.”
Additionally, it should be remembered that the GBA itself is surprisingly varied, as Felix Lee points out. “The GBA is a diverse framework consisting of nine mainland cities, along with Macau and Hong Kong, rather than a unified government entity. Each city has its own distinct needs and priorities. For example, Shenzhen, being close to Hong Kong, is enthusiastic about integrating with Hong Kong’s international healthcare practices. Conversely, Guangzhou, which has a strong tradition in medical research, does not share the same urgency for integration.”
Countering Criticism
Finally, the GBA project has come in for criticism both at home and abroad as having the potential to diminish Hong Kong’s unique strengths. Leung, as a long-term advocate for greater integration and understanding, predictably pushes back. “Some people may think that the GBA project will result in mainland China having an undue influence on Hong Kong policies as time goes on,” he begins. “However, I do not foresee any risk of Hong Kong losing its openness and its deeply rooted approach to global business. Our openness is not just about immigration policies or professional qualifications but also a mindset. Hong Kong people are business-minded and welcome open and fair competition. If someone is better, they come and compete, and in the process, no matter who wins in the end, we learn from them.”
Justin Wu is also confident in the mutual benefits of the GBA, especially in healthcare. “The idea of Hong Kong being swallowed up by mainland China is a mere first impression. One of the most important ways to keep Hong Kong unique and prevent it from being engulfed is to recognise our own unique strengths—differentiators that can never be copied or reproduced elsewhere. In terms of healthcare, Hong Kong can play an influential role in driving reform even in mainland China. Through our collaboration, we can create success stories and role models for others to follow, ensuring Hong Kong’s continued relevance and influence.”
“If you are strong, you don’t fear being overshadowed; instead, you help elevate others while creating a bigger pie for everyone,” concludes Secretary for Health Lo. “Hong Kong is a leader in medicine and healthcare, and we will continue to lead. The collaboration with the GBA is a win-win situation. Our experience with the University of Hong Kong-Shenzhen Hospital demonstrates how we can drive reforms and improve healthcare standards while benefiting our own medical community.”
